Is Retirement Dead?

Many workers never expect to retire.

Endless vacations. Time to do all those things you've put off doing during your career. With the modern working life full of constant pressure and stress, retirement gives many people a final chance to live their lives the way they've always wanted.

Yet for a large percentage of older Americans, retirement isn't the answer to their prayers. Indeed, according to a MarketWatch article on retirement trends, a strong majority of baby boomers expects to continue working past 65.

Staying in the ringThere are plenty of reasons why people want to stay in their jobs longer. As it says in the article, longer life expectancies mean that workers have more years in which they can be productive. Living longer also means you need more money to be sure you'll outlive your retirement savings, so continuing to earn a salary increases your financial security.

Many of these reasons reflect a different mindset from earlier generations of retirees. It's easy to understand why blue-collar workers who have done back-breaking physical labor for decades would look forward to the chance to rest and relax. But with the U.S. labor force evolving toward service-sector jobs that don't necessarily take such a high physical toll on employees, more workers can remain in their jobs beyond traditional retirement age. And given that their jobs have been their primary source of self-esteem and challenge, many people have no wish to change a thing.

High demand for workers in certain industries has fed this trend. Skilled medical personnel are in short supply. According to the International Herald Tribune, mining companies like Rio Tinto (NYSE:RTP) and BHP Billiton (NYSE:BHP) are offering large incentives to keep experienced miners on the job. Some companies have even started catering to potential retirees: Home Depot (NYSE:HD) started a program a few years ago that lets employees work summers in one location and winters in another, while Wal-Mart (NYSE:WMT) has visited senior centers to recruit employees.

Don't stop savingBut even if you think you might never want to stop working, that doesn't mean you shouldn't have a financial plan for your retirement. Putting aside savings toward your retirement is useful even if you never want to retire.

For one thing, the choice of when to quit may not be yours. High salaries and benefits costs give many companies a huge financial incentive to encourage older workers to retire. Even with the protection of age discrimination laws, the result of many early retirement programs is still to encourage older workers to leave work. You may get an offer you don't want to refuse.

More importantly, having a strong financial plan now will let you call all the shots in the future. If you're in good financial shape by age 65 and could retire on your savings if you wanted to, then staying at your job just gives you extra money to spend on whatever you want. You can scale back on your hours or take a part-time job in a brand new profession. Just as some dream of traveling around the world, you might dream of taking on new challenges with your work.

You call the shotsThe time to lay a solid foundation is now. The sooner you start, the easier it is to have everything ready to go when you turn 65 -- or whenever you decide to make a change. But if you've waited longer than you should have, don't let that stop you. It's never too late to get started, and every little bit you do now will give you more options later.

Retirement isn't a one-size-fits-all proposition. At our Rule Your Retirement newsletter, we recognize that your goals are your own, so our advice covers a multitude of possibilities for you to consider. To expand your horizons and see what you can do with your life, try out Rule Your Retirement free for 30 days and keep your retirement hopes alive.

Fool contributor Dan Caplinger wouldn't mind working past 65 if he could take a few years off before then. He doesn't own shares of the companies discussed in this article. Home Depot and Wal-Mart are Inside Value recommendations. The Fool's disclosure policy will keep you secure.

Author

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.
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